Innovation Key To Funding Nonprofits

Nonprofit news sites are emerging everywhere. In order to receive funding, they have to become very creative. Examples of this creativity are:

• produce content with syndication deals
• invest in student training programs
• invest in user membership programs
• seek media partnerships

Eric Newton, special assistant to the president of the James L. Knight Foundation, states that sites may be able to rely on foundations for only three to ten years. Diversifying revenue streams is the best way to wean dependency on a single source of income.

To view the full article, click here.

Six Ways to Fund a Non-Profit, Without an Investor*

1. Individual and institutional donations. For a non-profit, bootstrapping is self-funding from donations and fund-raising. The advantage is no time and effort is spent searching and preparing for the other alternatives, and no repayment terms or collateral are required. There is no discussion of equity, or return on investment.
   
2. Loans from a bank or other financial institution. Non-profits can apply for a bank loan or line-of-credit, just like any other individual or company. However, like anyone else, they will first need some collateral, or someone to guarantee the loan, and some evidence of a viable business, like receivables and inventory.
   
3. Personal loans from individuals, employees and board members. Personal loans are certainly an option, but should be avoided if possible. As in any company, they can lead to employee problems, or messy legal issues. A non-profit can also issue bonds to board members and members as a way of borrowing funds from those same people.
   
4. Government grants. The grant source often gets overlooked, but it should be a major focus these days when relevant due to the Obama administration initiatives on alternative energy and healthcare. The down side here is that real work is required to put in a winning application, and the award may be a long time in coming.
   
5. Private endowments. This is a funding source for non-profits that is made up of gifts and bequests subject to a requirement that the principal be maintained intact and invested to create a source of income for an organization. Endowments are usually limited to a specific area of interest by a philanthropist, and have many qualifications, so be careful.
   
6. Bartering services. Bartering occurs when you exchange goods or services without exchanging money. An example would be getting free office space by agreeing to be the property manager for the owner. This could work to get you legal or accounting services, but won’t get you cash to pay employee salaries. 

*Excerpt from Martin Zwilling's article "Six Ways to Fund a Non-Profit, Without an Investor"(the original article can be found here.